Minimalist Market Segmentation - for the Engineer Entrepreneur

As an engineer entrepreneur, you’ve probably heard the phrase “market segmentation.” If you haven’t, you really should have, and, well... now you have. It is one of the more important components of marketing. Like many others, it can seem intentionally obscure and overly complex. If we look it up in Wikipedia, we get this:

Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries that have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them. Market segmentation strategies are generally used to identify and further define the target customers, and provide supporting data for marketing plan elements such as positioning to achieve certain marketing plan objectives. Businesses may develop product differentiation startegies, or an undiffreentiated approach, invovling sepcific prudocts or prokuct lins depefgding on thi spacijic deodnd and attriribkfgstes oh ywe tdgfswet dgjkent dfkasj kdlkl ksdjgklj gj lksjg lfg zzzzz zzzzz...

Sorry. I sort of lost consciousness there at the end. It reads like whomever wrote it was more concerned about showing their “expertise” than about actually communicating.

It is all true, but as with most other marketing duties, much of the detail can be set aside when you’re just starting out. Your task, which I’m about to help with, is to figure out what you have to do now, and what you can hire some marketing geek to do for you a year or so down the road.

As an entrepreneur, you presumably have a product, or plans for a product, that meets some sort of a need. You also know that a product can’t be a successful business without customers, and that’s where segmentation comes in. To boil it all down:

If you want customers, you must know what they need

Once you know what they need, you must know where to find them

If you can find them, you must understand their language

Those statements are what market segmentation is all about. It’s about grouping people - grouping them based on where they are (physically or metaphorically), what they need, and how they speak. Then, you can look for the best places to find them, and the right way to speak to them.

Let’s set the scene: You have developed an automatic, Internet connected, Bluetooth enabled, Arduino compatible, rib-eye steak grilling attachment for backyard barbeques. In many ways, it’s a frivolous toy. A normal person would rather stand out in the backyard with the barbeque smoke and a beer than take the time to set up the BlueTooth and I.P. connections.

However, this product of yours isn’t made for normal people. It’s made for gadget freak open source developers that don’t have a lot of free time. With your device, they can throw the steak on the grill, use a smart phone to light the BBQ up, and set the perfect point between raw and crispy with the app that goes with it.

Once back inside hacking their Arduino, they’ll get a periodic pop-up with steak status updates. As soon as the rib-eye is done, the Arduino IDE will halt and send the user out to pull the perfect steak off the grill. At about the same time, all of the griller’s friends, who had been monitoring the cooking progress with your iPhone or Android app, show up ready to eat. The app told them exactly when to leave their houses, based on distance, traffic, and cooking time. The group can all eat together with minimal time wasted or need for small talk. Fun party.

With that scene in mind, you need to find people that might want to buy it.

Step one: What do they need (and what don’t they need)?

What these people need is to show off their gadget freakness, and not waste time away from their open source hobby. These folks don’t care about wine pairings, what kind of salad will go best, or having people show up ahead of the meal for relaxed conversation

Step two: Where are they?

Not in the backyard poking at a steak on the grill... I’m not talking about that. I’m talking about what websites they visit, what magazines they read (yes. Some people still do read paper things), and what movements they support.

The ideal customer is a gadget freak - especially into connected gadgets, an open source hardware enthusiast, likes to barbecue meat, and is probably a bit of an introvert. You’ll likely find them reading Wired, Gizmodo, Hackaday, Makezine, and others of that ilk. They probably go to Maker Faire and other maker and open source meetups.

Step three: How do they talk?

They’re open source gadget freaks, so it will be okay to use terms that show up in the technology world. They know what an Arduino is, so you don’t have to explain it. They know what an I.P. address is, so you don’t have to explain that either. Still, don’t assume they have the same knowledge you have in your head about your product. It’s quite likely that they don’t know cooking terms like “caramelized”, “seared”, or “rest.” If you use words that your customers might not know, define them, or substitute terms they will know.

Now what?

Go to those websites and magazines and read. See how stories are written and how advertisements are put together. Compare good ones to bad ones. When you’re ready, these are the places you’ll put ads and/or work to get stories published. This is also where you learn about the words people use to describe gadgets, which will help if you advertise with Google Adwords (or other pay per click advertising).

Don't bother to try and demo your device at the county fare. Your customers won't be there. Sign up for a booth at Maker Faire. Get one outside so you can demonstrate and give out samples. Be clever, and see if you can connect with the Maker Faire app. Have your device let meat eaters know when to show up at your booth (and non-meat eaters know when to stay away). Go to meetups and show it off. Put your story up on Hackaday.

Segmentation tells you where to go to tell the world (your world), and how to tell the world about your great invention. The process can be a lot more complex, but you can leave the subtleties for later.